We’ve made it to Wednesday, folks. As Permissionless IV continues, we’re also looking at what’s happening outside the conference.

Casey has an interest rate outlook update after Chair Jerome Powell’s latest testimony. And Ben highlights yet another development on the tokenized RWA front.

So, you’re saying there’s a chance 

Jerome Powell, tight-lipped while facing questions from lawmakers, didn’t say whether the Fed would cut rates in July (or even this summer).

But he also never definitively said it wouldn’t. 

Odds of a 25-basis point interest rate cut at the FOMC’s late-July meeting increased from 18.6% to 20.7% today, per CME Group data. It’s a small move, but a move nonetheless — one that signals investors are reading between the lines when it comes to Fed speak. 

“If it turns out that inflation pressures do remain contained, we will get to a place where we cut rates sooner rather than later,” Powell told members of the House Financial Services Committee on Tuesday. “But I wouldn’t want to point to a particular meeting.”

It’s similar to what Powell said last week after the FOMC concluded its June meeting and announced it would hold interest rates for now. 

Powell’s comment comes days after two Fed governors — both appointed by President Trump — said it may make sense to cut at the July meeting. Christopher Waller on Friday said the FOMC needs to have a rate cut on the table next month. Michelle Bowman agreed on Monday, adding that unless there’s a major uptick in inflation, a July cut should be in order. 

Analysts had predicted tariffs would be impacting prices by now, weighing on recent progress on the inflation front. But economic readings so far have been contained. May’s headline CPI increased 0.1% over the month, less than projections of a 0.2% increase. 

Annual inflation is still reading higher than the Fed’s 2% target (annual headline CPI for May came in at 2.4%), but it hasn’t jumped too much since President Trump’s “Liberation Day” in April. Headline PCE (the Fed’s preferred gauge) came in at 2.1% in April, a decrease from March (2.3%). 

We’ve written before about why this may be. Businesses were expecting tariffs, so they proactively increased inventories. Trump’s tariff policies are also prone to revisions, so it’s understandable that companies are hesitant to immediately raise prices. 

Oil prices have stabilized since their initial jump earlier this month, but the situation in the Middle East is precarious. Should things escalate, a surge in oil could derail progress on inflation. 

Powell resumed his two-day congressional testimony this morning in the Senate, making similar comments about a need to monitor the economic situation before adjusting policy. 

Stocks were mostly flat during the first half of the trading session, but both the S&P 500 and Nasdaq Composite indexes were modestly in the green. After closing on Tuesday just 1% off from a new all-time high, the S&P 500 may be poised for a breakout. 

Looking ahead, Friday’s PCE report will be the biggest tool for investors looking to predict the Fed’s next moves. Keep an eye on your inbox, as we’ll unpack that at the end of the week.

— Casey Wagner

Before writing about crypto, I spent a couple years covering the traditional asset management industry (mutual funds, ETFs, etc.). 

Janus Henderson was one of the companies on my beat. So when I saw the investment firm’s name in my crypto-centric inbox this morning, I was once more reminded of the ongoing TradFi-DeFi intersection.

The announcement dealt with the launch of a credit infrastructure DeFi protocol called Grove, which allocated $1 billion from the Sky ecosystem to the newly tokenized Janus Henderson Anemoy AAA CLO Strategy (JAAA).

Janus Henderson partnered with Anemoy and Centrifuge to launch its first tokenized fund — offering access to short-term US Treasury bills — last September.

Nick Cherney, Janus Henderson’s innovation head, noted at the time that “bringing robust institutional collateral pools into decentralized autonomous organizations and stablecoin ecosystems” is a big piece of the TradFi-DeFi bridge. 

Now, Janus Henderson has a tokenized version of the CLO ETF it launched in 2020. The fund, which seeks income via collateralized loan obligations of various maturities, has more than $20 billion assets under management. 

“CLOs are just one of the many assets ripe for movement into DeFi due to their attractive yield profile and structure,” Grove Labs co-founder Sam Paderewski argued. 

Janus Henderson moving funds onchain reflects the firm “preparing for the possibility that blockchain technology will transform traditional finance in the long term,” Cherney said in a statement today.

It’s early days, with stablecoins’ market cap around $240 billion. Tokenized private credit and tokenized Treasury products have grown considerably over the past year, but are only valued around $14 billion and $7 billion, respectively.  

So this tokenized CLO offering represents just another development in what many expect to be a massive space. We’ll continue to monitor.

— Ben Strack